Not Your Grandfather’s Risk
Let’s Talk ESG
A couple days ago I guest lectured in Ethics of Finance & Financial Engineering at Stanford, where I discussed the ways managers in different asset classes are incorporating ESG risk and impact into their due diligence processes. Evidence for a sustainable edge in investing is growing by the day (the latest edition of the Journal of Environmental Investing sitting on my desk is 369 pages long). Back in 2015 Morgan Stanley delved into this topic in its report, Sustainable Reality: Understanding the Performance of Sustainable Investment Strategies. The report concluded that “sustainable equity mutual funds had equal or higher median returns and equal or lower volatility than traditional funds for 64% of the periods examined.” But public equity is only part of the ESG story. What’s a manager in a private asset class to do? At Flat World, we don’t accept the status quo of ESG analysis or impact measurement. To do that would be to ignore the wealth and impact-generating opportunity that lies before us.
The 2015 MS report also came to the following conclusion: “Manager selection is crucial for sustainable and traditional investments alike.” You may notice that when you ask your RIA for investment options that align with your values, he or she does one of two things: 1) gives you a blank stare, or 2) points you to substandard opportunities that offer concessionary returns. With the influx of talent into responsible investing and the optimization of ESG research and impact analysis, you no longer have to settle for mediocre opportunities. We’ll help you and your advisor outperform them socially, environmentally, and financially.
Anna-Marie Wascher, Founder/CEO
A group of 12 investment consultants has publicly backed guidance by the U.K. Pensions Regulator stating that retirement plans should take ESG factors into account. (But won’t that mean sacrificing returns?)
Ever heard of geofinancial engineering? Researchers recently showed that real-time satellite data on methane emissions from publicly listed companies could be analyzed by traders to ultimately move those companies’ share prices.
OpenInvest, a socially responsible investing app for retail investors seeking competitive returns, gives tips on shareholder activism for the retail investor.